from the corpse-reanimation-never-works-well dept

Back in March, TiVo purchased Aereo's trademarks and customer rosters for around $1 million at auction, after Aereo's disruption efforts and clever legal arguments imploded spectacularly last November. Details are incredibly vague, but TiVo appears interested in resurrecting the Aereo service in some capacity, offering an improved -- and legal -- version of the controversial internet video service. Early details are spectacularly vague, but TiVo appears interested in marketing something to cable partners that will help them target cord cutters:

"It’s one helluva cheap way for cable operators to have an OTA/OTT device that says, ‘Satellite cord-cutter, I have a broadband package for you with a video component,'" (TiVo CEO Tom) Rogers said. "I think it allows them [the cable operator] to own the low-end and win over satellite subscribers."

The problem is that many cable operators don't want to make any truly disruptive over-the-top plays, since any value-oriented, disruptive internet video offering is going to cannibalize existing pay TV subscribers. That's why the cable and broadcast industry's Hulu has remained a dull, glorified ad for traditional cable TV. There has been some traction made on this front (Cablevision offering free antennas with broadband, for example), but by and large, cable execs remain terrified of upsetting the Apple cart. Rogers admits there's still a question as to how to make cable partnerships work:

"TiVo reasons that OTA, combined with broadband-fueled over-the-top services, presents an opportunity to help its cable partners target a small but growing number of cord cutters who are seeking less-expensive video and TV alternatives but who are also willing to create their own bundles. "The question is, how do you do that?” Tom Rogers, TiVo’s CEO and president, said during an interview last week at the INTX show in Chicago. “To us, the answer is pretty clear — it’s kind of the Aereo model, done legally and better."

The problem is, by the time TiVo's internet video offering arrives, it will be joining a crowded market saturated with services from the likes of Verizon, Dish (Sling TV), Sony and Apple. It's unclear how TiVo intends to truly differentiate itself from the pack, and the TiVo and Aereo brand may not be enough. Aereo's draw predominantly was its low $8 a month price tag, which was made possible because the company wasn't paying retransmission fees. Aereo's entire technical model of leasing customers micro-antennas and cloud DVR space was based on its legal efforts to tap dance around having to pay such fees. A legal version of Aereo couldn't offer the kind of disruption Aereo was capable of, because the courts have declared Aereo's particular brand of innovation to be illegal.

In other words, TiVo's version of Aereo will belatedly join a crowded field of over-the-top services, and while the brand name will provide some traction, the end product is likely to only share a passing resemblance to the Aereo people knew.

from the wherefore-art-thou-roamio dept

TiVo has released a new product called "Roamio" which looks suspiciously like the recently-declared-infringing Aereo. Roamio lets users "record, store and playback" over the air programming. Just like Aereo. There's just one distinction -- and it apparently makes all the difference in the world: Roamio's cable length is a lot shorter. As David Post notes, while Aereo and Roamio's services are nearly identical, the length of the cable changes the legal dynamic:

I’m pretty confident that the new TiVo box steers clear of any copyright problems — not the first time, and probably not the last time, that our too-complex and illogical copyright law draws opposite conclusions when applied to functionally equivalent technology. The new Roamio is the precise analogue of the Sony Betamax – just a box allowing customers to record that to which they already had free access, and to play those recordings back to themselves — the distribution of which, the Court declared way back in 1984 in the seminal Sony v. Universal case, did not constitute copyright infringement. Aereo tried to make this argument (that it was just a Betamax dressed up in new technological garb) but failed – in part because it was supplying not only the recording/playback capability, but the antenna itself, to customers. This seemed to be important to the Court, because it made it more difficult for Aereo to argue that it was just recording material the customer already “owned”; no, the Court said, Aereo was actually going out and getting this content for the customer, and then recording it, which took it out from under the Sony no-infringement umbrella. More importantly, but sticking a separate box in each user’s home, TiVo avoids the charge that was fatal to Aereo, with its centralized facility: that it is “publicly performing” the copyrighted programs in the OTA broadcasts. It’s close to impossible to argue that TiVo is somehow publicly performing copyrighted works by selling these boxes – whatever “performances” take place inside users’ home are pretty clearly non-infringing “private” performances.

In short -- just as we've pointed out from the beginning -- the only basis on which Aereo might be infringing is that the copyright law is different if you have a short cable between the antenna and your screen (TiVo) or a long cable (Aereo). It seems somewhat ridiculous that the length of the cable could possibly change the analysis of a copyright case, but welcome to today's nonsensical copyright regime.

Of course, Post notes that the broadcasters still might try to sue anyway, and that does seem likely. Remember, they're already suing DISH over its advanced DVR technologies. And the networks actually are trying to claim that the Aereo ruling helps them in that case (though it's a very weak argument). So there's a half decent chance they'll sue Tivo over Roamio as well.

It seems fairly clear at this point: the broadcasters have decided that any innovation that lets the public watch TV in a better way must be an existential threat that should be sued out of existence. It's felony interference with a business model, and tragically, copyright law seems to be the most popular and distorted tool for those claims.

from the offensively-defensive dept

Over the past few years, as competition in the DVR market has become tougher, TiVo has become more and more reliant on using its patents to stop competition and innovation, rather than focusing on competing in the marketplace. its most famous case was the one against EchoStar, which even included TiVo buying a bull (literally) in Eastern Texas, where the district court case was heard. While it won at the district court level, during the appeals process, the Patent Office suddenly indicated that the patents might not be so solid. Not long after that, TiVo and EchoStar worked out a settlement.

TiVo found the process so enjoyable that it apparently started thinking about a second career as a patent troll -- and has already sued Verizon and Motorola. Not surprisingly, it's been pushing some others to license some patents... and at least one large player has had enough. Cisco, owners of Scientific Atlanta, a maker of settop boxes and DVRs, has filed a lawsuit seeking to invalidate four TiVo patents -- or, if the patents are found valid, a declaratory judgment that it does not infringe.

Of course, by filing first, Cisco was also able to file the case in San Jose, rather than letting TiVo try to get the case into Texas (despite the fact that both Cisco and Tivo are located not far from each other in Northern California). As far as I know, TiVo has not purchased a bull in San Jose.

from the that-won't-go-over-well dept

Late last week Charlie Ergen and the folks at Dish Networks presented the TV networks with a bit of a conundrum. You see, the company decided to actually give consumers what they want: setting up a special DVR system, called Auto Hop, that would let viewers not just automatically DVR the entire primetime lineup of all the major networks with the single push of a button -- but also to automatically skip commercials when watching the playback, as long as it wasn't the same day the shows aired. This is something that consumers clearly want -- which Dish execs were pretty upfront about:

“Viewers love to skip commercials,” Vivek Khemka, vice president of DISH Product Management, said in a statement

But, of course, who is a consumer in this market gets complicated pretty fast. The TV networks, of course, make a fair bit of money from advertising on these shows, and they're not happy about any idea that means people might skip commercials. Those of you who have been around for a bit may recall a few relevant stories. First, there was Jamie Kellner, the former chair of Turner Broadcast Systems, who once claimed that walking away from your TV while commercials aired was a form of theft. Then, of course, there was the famous ReplayTV case. If you don't recall, ReplayTV was an early competitor to TiVo, and in many regards a better product. Among its features, it took an already considered legal feature from VCRs called "commercial skip" and added it to DVRs. The industry sued, in large part because of this feature, which they considered to be breaking the law.

Of course, the expense of the lawsuit resulted in Replay's parent company SonicBlue declaring bankruptcy. It then sold off the remains to D&M, who tried relaunching a version of the product without all the cool features people liked, and it went nowhere. Eventually, DirecTV bought the remnants. However, the basic lawsuit died out with the bankruptcy. A bunch of ReplayTV users, led by Craig Newmark from Craigslist, actually tried to continue the case on their own, to have those features declared legal, but after the networks promised not to sue those users for using the features, the judge tossed the case.

Left unresolved, of course, is whether or not features like commercial skip are actually legal.

As some are pointing out, the TV networks may have missed a golden opportunity by not continuing the fight against Craig and the other users, since they wouldn't be able to afford the bigtime lawyers that Ergen and Dish can easily toss out here. So the TV networks basically have to make the decision if this is really a battle worth fighting.

It does seem clear that the anti-consumer folks who run the TV networks would certainly like to slap Dish around for this move:

"I think this is an attack on our eco-system," said NBC Broadcasting chairman Ted Harbert on a conference call Monday. "I'm not for it."

Isn't it just like NBC to think that a tool that the public actually finds useful is an "attack" on their ecosystem? At some point, in the way, way distant future, perhaps we'll live in an age where companies like NBC Universal recognize that, when things are more efficient and easier for consumers, it is a good thing, rather than something to freak out about and declare evil?

from the putting-the-bull-to-good-use dept

It's been said that the only thing patents encourage is more patents, and you can argue that ridiculous valuations seen on patents these days, combined with the ability to monetize them without doing a damn thing, has more and more companies seeming to be considering if there's more value in just focusing on their patents. While the Motorola Mobility purchase by Google seems to have woken up the mainstream press to the problems of the patent system, for big companies, who haven't been doing much innovating lately, suddenly there's a temptation to focus more money on investing in their patents, rather than on investing in actual innovation. There's been a lot of speculation that Kodak is now focusing on auctioning off its patents, since the company believes they may be worth much more than the rest of the company. There are rumors of RIM selling its big patent portfolio as well.

You have to wonder if the company still owns the bull that it bought in Marshall, Texas.

Either way, it really is a sad statement. All these companies (mostly once big companies who have failed to stay on top) now seem a lot more focused on "maximizing the value of our patent portfolio." You can understand why they want to do this in the short term, but it shows the screwed up incentives of the system. It's not the innovation that's valuable. It's the patents that usually have little to do with the actual innovation that have become valuable. So these companies start spending all their resources on patent issues, rather than actual innovation. It's the exact opposite of how the system is supposed to work.

from the money-wasted dept

TiVo and EchoStar have been in a ridiculously long patent dispute over DVR patents that began years ago. TiVo won nearly all of the early rounds, but the tide turned a bit last year, though it looked like TiVo was going to get something out of this. Of course, all of this was happening while the Patent Office itself was expressing doubt about the patents in question.

The case is now over, with EchoStar agreeing to pay TiVo $500 million (significantly more than the initial jury award). Of course, some will use this to suggest EchoStar should have just paid up early on, and from a financial perspective, they're probably correct. But, really, this once again shows the ridiculousness of the patent system. Many millions of dollars were wasted on this lawsuit, and then a final massive transfer payment is made. All of that money could have gone towards actually innovating and building better products. What a waste.

Of course, this also brings to a close one of the more bizarre side notes to this story. Back when the district court case was being tried in East Texas, TiVo paid $10,000 to buy an award-winning bull in Marshall, Texas... which it renamed TiVo. Pretty much everyone suggests this was a really cynical ploy to influence the jury. I'm curious what ever happened to the bull?

from the oops dept

Early on TiVo had won pretty much of all of its patent battles with EchoStar over its DVR technology, perhaps helped along by a bit of bull buying in Texas. We had noted, however, that the USPTO had expressed concerns over the validity of the patents, and we wondered why the court case would move forward while the patents themselves might be rejected by the Patent Office. But, the case did go forward, and while TiVo initially won at the appeals court level (which made it so happy that it sued others and demanded ridiculous sums from EchoStar), things haven't been looking quite so good lately.

Last month, the appeals court vacated the earlier decision, and agreed to rehear the case. And, now, it turns out that the USPTO has rejected two patent claims that were a key part of this fight. Of course, as TiVo is quick to point out, this isn't the end of the review process, but it certainly raises serious questions about the validity of the patents TiVo is basing its whole strategy on.

from the not-so-fast-there... dept

TiVo's lawsuit against EchoStar for patent infringement has been a mostly one-sided affair. TiVo appeared to win at every turn, to the point that there were stories suggesting EchoStar would have to start blocking the use of its own DVR. TiVo had celebrated these victories by suing others as well, and demanding ridiculous sums of money from EchoStar. Of course, it seemed odd to us that, while all of this was happening, the US Patent Office was admitting the patents might not be valid. Oops.

from the patent-wars dept

Ah, the patent wars. As you're probably aware, TiVo spent years fighting a big legal battle with EchoStar/Dish Networks over some patents on DVR technology. TiVo won big, and then immediately turned its patent lawyers on some other companies including Verizon. In Verizon's response to TiVo's lawsuit, it went nuclear back, accusing TiVo of violating Verizon's patents on DVR technology -- including a patent that the world's biggest patent hoarding firm, Intellectual Ventures, gave Verizon for the purpose of being used against TiVo.

6,381,748: Apparatus and methods for network access using a set-top box and television

The three in bold are found in both lawsuits. Now, to be fair, before looking at the details, I was guessing that Verizon would also be using the patent it got from IV, but that patent (5,410,344) appears to be the one patent that Verizon is asserting against TiVo, but not against Cablevision. I have no idea if this is because nothing Cablevision does is covered by that patent, or if Verizon has limitations on what it can do with the IV patent. Still, given the overlap here, the timing, and the fact that many of these patents are pretty old, you really have to wonder if the lawsuit from TiVo and the scouring of patents for a countersuit also gave Verizon the idea to sue its arch-nemesis in the Long Island market over the same issues.

Think about this for a second. TiVo sued Verizon over patents. Traditionally in patent lawsuits between two big tech companies, the sued party then finds some of its own patents that the other company is infringing on and then counter-sues. But, in this case, apparently Verizon couldn't find anything good, and IV dug through its own portfolio and transferred the rights over to Verizon so Verizon could pound back on TiVo. This must be what Verizon paid Intellectual Ventures $350 million for. The right to get handed patents that it has no intention of using or implementing, but over which it can sue others. I don't think this is what Thomas Jefferson envisioned when he set up the patent system.

Amusingly, Intellectual Ventures tries to position this all as a good thing:

Don Merino, vice president of licensing at IV, said it's an example of IV taking "a much more customer-centric approach."

"We want to figure out how to get out of the, 'I win, you lose' to a much more collaborative, 'We both win,'" said Merino.

Well, sure. Unless you're TiVo. Or the general public who would prefer that these hundreds of millions of dollars getting tossed around went towards actual innovation instead of lawsuits.